Skagen Varmevaerk

Credit: Wärtsilä

As Europe’s power market changes, combined heat and power plants such as those used in district heating networks are increasingly called on to help balance the grid. Adam Rajewski and Hanna Alavillamo discuss how dynamic district heating plants can address this growing need.

Europe’s electricity market is changing – due largely to an increasing amount of variable renewable energy production, such as wind and solar. The positive side to this trend is the reduced amount of greenhouse gas emissions; the European Union is well on track to meet its target to reduce CO2 emissions by 20% from 1990 levels by 2020. In 2013, EU emissions fell by 1.8% compared to the previous year, bringing the total reduction up to 19% compared to 1990. In October 2014, EU leaders decided that the Union shall further reduce greenhouse gas emissions, down to 40% of 1990 levels by 2030.

The positive change in emissions reduction has led to some other challenges: high, unpredictable peaks and dips in electricity production. The power system must be kept in balance, which causes problems for traditional power plants such as coal-fired, nuclear and combined-cycle gas turbines (CCGT), as they are not able to react to variations in electricity output as fast as they should. If not enough electricity is produced to the grid, there will be blackouts. If too much is produced, it has to be consumed somehow, which means it has to be sold to another grid, stored (e.g., by pumping hydro), or – as it often is – curtailed. This has further led to extreme variations in electricity prices.

When there is a lot of wind and solar power available and not so much consumption, the real-time retail electricity price might even be negative. If, on the other hand, there is no wind or solar power available and demand is high, the spot price of electricity will rise dramatically. In order to keep the power system in balance and also make the most of the high price peaks, more flexible electricity production capacity is needed. Increasing variations in electricity consumption further add pressure for increased flexibility.

According to the International Energy Agency (IEA), internal combustion engine (ICE)-based power plants have excellent capabilities in balancing the electricity network, thus enabling the maximum penetration of renewable energy production into the system, and also allowing traditional power plants to run at optimal capacity. These flexible power plants can start up to full load in only a few minutes when there is shortage in electricity production and/or when the electricity price is high. When the requirement and/or price drops again, the ICE power plants can ramp down almost immediately. This not only benefits the environment by taking the maximal output from renewables, but also causes dramatic savings for both the grid and power plant owners, and also to the electricity customers.

Dynamic ICE-based CHP

An ICE power plant involves a very simple concept of a modern internal combustion (i.e., reciprocating) engine directly driving a synchronous generator. While the concept itself is not new and is very well proven, recent progress in engine design makes it increasingly competitive even in large-scale commercial power plants. This is thanks to a number of features inherent in this technology, such as:

• Very high efficiency. Modern ICE power plants reach the highest efficiencies of all simple cycle plants – nearly 50%;

• A wide spectrum of fuels. Most engine plants to date run on either natural gas or various petroleum products, but other proven options include liquid and gaseous biofuels or multi-fuel plants able to switch between different fuels while running;

• Excellent dynamic properties. State-of-the-art ICE plants running on natural gas may start up from standstill to full output within just two minutes. Moreover, frequent startups and shutdowns do not cause any extra wear to the engines. These features make ICE technology a very attractive solution for dynamic energy markets;

• Low costs. Investment cost of the largest ICE plants is roughly around €500/kW of installed electrical capacity. Operation and maintenance costs are also competitive;

• Very short construction times, thanks to a simple and pre-engineered structure. An ICE plant with an output of hundreds of megawatts may be constructed within just one year. Power plants utilizing ICE technology are typically built as modular systems. They consist of multiple parallel independent units. This approach ensures multiple important benefits to the operator;

• As the individual modules can be operated independently, it is possible to overhaul them without affecting the availability of the other modules. This ensures that part of the plant’s capacity is always available for power and heat production, as maintenance procedures never require shutting down all the modules at the same time;

• For the same reason, plant reliability is also very high. Even a serious failure of any single piece of equipment cannot cause an outage of an entire plant;

• Modular design enables very efficient load control, as partial output may be achieved by simply shutting down individual modules, while keeping the remaining units operating at nearly full load, and therefore nearly nominal efficiency. This is demonstrated in Figure 1;

• Modular design enables step-by-step extensions. The plant operator may gradually increase the installed capacity according to growing energy demand or availability of investment funds. A gradually extended plant may also start generating revenues before the whole project is completed.

Figure 1. Part-load performance of an ICE power plant is high thanks to the high efficiency of multiple units

Waste heat recovery from ICE power plants

Practical technical restrictions are the reason that part of the fuel energy cannot be converted into useful work and is released as heat. In most traditional power plants this heat is released to the environment through cooling systems and exhaust – i.e., effectively wasted. By capturing this thermal energy and using it to supply heat to households, businesses and industries, total fuel utilization efficiency may be radically increased. It is estimated that deployment of more cogeneration plants has the potential to reduce greenhouse gas emissions by up to 250 million tonnes of CO2 equivalent by 2020.

Figure 2. Simplified process diagram of ICE power plant heat recovery with district heating

Practically every power plant technology based on a thermodynamic cycle may be used for cogeneration, although the scope of required design changes depends considerably on the solution involved. For example, for technologies based on steam turbines, it is necessary to redesign the turbine itself and change its operating parameters. For such plants, using heat recovery requires reducing electrical output, and therefore also electrical efficiency. For other technologies based purely on gas cycles, it is possible to use heat recovery without interfering with the prime movers or affecting their operation. This approach may be used with ICE technology. Converting an engine-based power generation module into a CHP module is relatively simple – it is only necessary to install properly configured heat exchangers in the cooling circuits and exhaust system. Heat recovery components do not affect the power generation process in any way, and engines do not need to be modified at all.

Recovering heat from an ICE power plant may increase its total efficiency to 90% or even further, while retaining the electrical efficiency at a very competitive level of nearly 50%. The sources for heat recovery are exhaust gas and engine cooling (jacket water, lubricating oil and charge air). As the exhaust gas temperature is relatively low (typically below 400°C), materials that can handle high temperatures are not needed.

Figure 3. Typical layout of CHP solution in an ICE power plant

A simplified process arrangement is displayed in Figure 2. Figure 3 illustrates a typical ICE power plant using heat recovery for district heating purposes.

Dynamic district heating: the concept

Traditionally, most CHP plants did not participate in the process of balancing national power systems. Instead, they were dispatched according to heat demand, and the electricity was mostly considered a by-product and sold to local utilities, often at flat prices. However, due to the changes described earlier, it is increasingly difficult to maintain this modus operandi. In those countries which have invested heavily in renewable power generation systems, a situation where there is too much operating capacity is not unusual. There may also be situations when, due to a rapid drop in renewable power generation, more operating capacity is rapidly needed in the system, even if the heat demand is temporarily low (e.g., in the middle of summer). In such circumstances, power systems can no longer afford to have considerable capacity installed at plants which do not respond to variable electricity demand, and therefore district heating plants should also join the balancing process. The operators are incentivized to do so by increasingly volatile electricity prices and discontinuation of long-term flat-rate contracts.

Yet not all CHP plants are able to react fast enough to make a major difference. Especially steam cycles cannot be rapidly started up or shut down. Also, the demand for district heating and electricity do not go hand in hand (often it’s exactly the other way round), and covering heat demand is an absolute must for a district heating utility. Bearing this in mind, meeting the heat demand of European customers when more and more renewable electricity is produced and the running hours of traditional thermal power plants are likely to decrease is becoming increasingly difficult.

The answer to this modern challenge is dynamic district heating (DDH) – a concept involving dynamic dispatch of a CHP plant according to the demand of the national power system. A DDH plant supports the power grid, while fulfilling its primary mission of heat generation. These seemingly contradictory objectives can be accomplished thanks to heat accumulation. Even a simple hot water storage tank may enable dynamic operation of a CHP plant. In such a solution, the prime movers are started up when the electricity demand (and thus also its price on the day-ahead or intra-day market) is high. The heat generated during operation is recovered; some of it is supplied to consumers according to the current load, while the rest is stored for later use. When electricity demand and prices drop, the prime movers are switched off, and the heat demand is covered from the heat storage tank.

Figure 4. Simplified diagram of the DDH operating concept

In some cases where markets are particularly volatile, such a plant may be additionally extended with simple electrical boilers, which cover heat demand during prolonged periods of low electricity demand when market prices are very low (or sometimes even negative). The concept of a DDH operation is presented in Figure 4.

1. When the electricity price is above a certain level, the CHP plant’s engines are in operation (blue areas), producing electricity and heat. Some of the heat is delivered to the consumers directly from the engines (blue areas), and the rest is used to charge the heat storage tank (green curve);

2. When the electricity price drops below the profitability limit, the engines are stopped. The heat demand is covered from the heat storage tank (green area);

3. When the electricity price gets extremely low due to overproduction of power in the system, the electrical boiler (orange area) is started, providing cheap heat and helping to balance the power grid.

Of course, in order to implement this concept, appropriate generation technology is required – one that enables rapid starts and stops in a matter of minutes. As discussed before, ICE technology has all the features needed for this task.

DDH in practice

While the concept of dynamic district heating is relatively new, some CHP plants have been operating in this manner for many years. Most cases of this operating regime can be found in Denmark, where district heating utilities are utilizing high electricity price volatility attributable to an extraordinarily high share of wind power in the energy system. Examples of such plants include Skagen, with three Wärtsilä engine-generator units (commissioned in 1998), and a small single-engine plant at Ringkøbing (commissioned in 2002). Both plants are equipped with heat storage tanks and electrical boilers, and are dispatched according to the principles described in the previous section.

In the case of a large district heating network, it can be feasible to run a district heating ICE CHP plant in a dynamic way, also without any heat accumulators. This is the case in some CHP plants that Wärtsilä has supplied to Hungary, e.g., Budapest-Újpalota. These power plants were initially operated as baseload heat sources, but after changes in Hungary’s cogeneration support mechanisms this was no longer feasible. Nowadays the plants are following the network load in a dynamic way, benefitting from the higher prices of peaking power. The plants themselves have not been altered in any way; only their running profile has been changed. This enables them to continue their operation in the new market situation. Nowadays, the plants can have up to 12 starts per week without any effect on plant maintenance.

Thanks to the dynamic features of the ICE technology used in these plants, electricity can be provided to the network whenever it is feasible. When the plants are running, district heating is also provided to the city network. However, as there is no heat storage, the dynamic features of the ICE district heating system can be maintained by flexible operation of the other CHP plants and/or through the use of heat-only boilers.

Covering demand, improving system stability

Thanks to its inherent flexibility, internal combustion engine technology provides an excellent solution for dynamic power and heat generation. When combined with simple heat storage, it enables covering heat and power demands even on very volatile and unpredictable modern markets, heavily affected by massive deployment of intermittent renewable sources.

Modern dynamic CHP plants, which operate in a flexible way according to variable market conditions, may not only cover two separate demands with very different characteristics (i.e., demand for heat and power), but also improve system stability by providing power exactly when it is needed.

Yet this does not exhaust the capabilities of the engine technology in modern CHP applications. Thanks to their low investment cost and high efficiency, they may be competitive even in most traditional markets and in large-scale applications, traditionally reserved for gas turbine combined cycles. Published studies indicate that using engine technology instead may offer comparable (or even better) feasibility in a traditional stable energy market, while at the same time preparing their operator for the challenges of the future.

Adam Rajewski is Sales Manager at Wärtsilä Energy Solutions, Poland. Hanna Alavillamo is Marketing Specialist at Wärtsilä Energy Solutions, Finland